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Largest US Radio Company iHeartMedia Files For Bankruptcy (reuters.com)
The largest U.S. radio station owner, iHeartMedia, has filed for Chapter 11 bankruptcy as it "struggles with $20 billion in debt and falling revenue at its 858 radio stations," reports Reuters. The company has reportedly reached an agreement with holders of more than $10 billion of its outstanding debt for a balance sheet restructuring, which will reduce its debt by more than $10 billion. From the report: Cash on hand and cash generated from ongoing operations will be sufficient to fund the business during the bankruptcy process, said iHeartMedia, which owns Z100 in New York and Real 103.5 KISS FM in Chicago. The filing comes after John Malone's Liberty Media Corp proposed on Feb. 26 a deal to buy a 40 percent stake in a restructured iHeartMedia for $1.16 billion, uniting the company with Liberty's Sirius XM Holdings Inc satellite radio service. Clear Channel Outdoor Holdings Inc, a subsidiary of iHeartMedia, and its units did not commence Chapter 11 proceedings. The company had 14,300 employees at the end of 2016, according to its most recent annual report.
ClearChannel is one of the reasons people don't want to listen to terrestrial radio anymore. They have a near monopoly in so many regions, and instantly make radio bland and corporate. I'm a bit surprised their attempts at payola with their awards and festivals haven't saved them.
I'm a good cook. I'm a fantastic eater. - Steven Brust
I am just shaking my head. They own 858 stations and have $20,000,000,000 in debt?
Holy. Shit.
That's more than $23,000,000 per station. In debt. Radio stations do not cost $23,000,000.
I cannot figure out how they've managed to run up $20,000,000,000 in debt. That takes a special kind of talent.
And, I mean "special" as in "special ed".
Do you have ESP?
Unfortunately, those locally-run stations usually can't afford to survive on their own. That's why they mostly joined the big conglomerates in the first place.
I've worked at a local radio station. It's not a cheap business. Beyond the equipment costs, there are licensing fees that are essentially mandatory to keep content on the air. Even for talk radio, people want to be paid for their time. If you're going to avoid licensing by producing your own content, you need a studio, with facility expenses. Then, of course, you have all of the overhead of handling the technology involved, which today involves a significant IT budget, as well as the usual communications link to the transmitters, transmitter space rental, and so on...
My station was pretty much just the hobby of a few wealthy listeners. Some folks dump money into a boat-shaped hole in the lake, but these folks likes to burn their cash at the top of an antenna tower. Our advertising income barely covered the electricity costs.
You do not have a moral or legal right to do absolutely anything you want.
Toys R Us went bankrupt, they had only $5B debt but plenty of stock and store property and we're still selling items. How does any radio corporation get to the point that they are $20B in debt, they basically own nothing of any real worth. Even the stations themselves are small and limited tech. iTunes has been out for years. Napster. Writing has been on the wall for years. Who was loaning or lending this company money? At $10B or $15B in debt people didn't stop to think, hmm, may even we should cut them off? $20B is what it takes. Insane.
I seem to recall that radio stations were already failing left and right before the Internet was a thing. It’s hardly surprising that a large corporation whose main business model is the purchase and consolidation of cash-strapped radio stations would in turn fail at some point. It’s basically the old “we sell everything at a loss, but make it up in volume” model.
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I dunno, my car's radio is permanently stuck on CBC Radio 1 when in Canada, or the local NPR affiliate when in the US. But then, I'm a left leaning socialist (at least based on some people's political spectrums). I enjoy the various shows for being thought provoking, topical, and exposing me to ideas and things that I often do not agree with. If I was just snarfing down podcasts, the chance of me listening through something that I don't agree with are significantly smaller. But doing that is good for my well being.
...si hoc legere nimium eruditionis habes...
Note that almost every new car is a SiruxXM subscriber. More than half of their subscribers are likely the trial subscribers from new car purchases.
Beyond that, despite never haven given them a dime, they have frequently given me new free trials.
At least in my car, the audio quality is crap for satellite radio, compared to HD radio or a streaming service. Even if I liked the programming, the quality would have killed it for me.
XML is like violence. If it doesn't solve the problem, use more.
Had IHeartMedia kept the same programming that stations had before, or provided stations with some autonomy, things would have been completely different. People would be exposed to new bands and songs, the radio station would be a core pillar of the community, DJs could rally people for worthy causes, and musicians would have a place to get their hot tracks played.
However, this didn't happen. They took the quick buck route and destroyed their future. This worked well for a few years, but it killed radio as a whole as a viable medium. People have moved on to social networks and streaming sites. Only talk radio remains.
I hate to break it to you, but broadcast radio listenership is doing just fine. With 93% reach, 271 Million listen weekly, and for a well run station, it's still a license to print money.
https://www.newsgeneration.com...
The problem here is the debt incurred by iHeart (Clear Channel) with their overreach paying huge sums of money for broadcast properties trying to create their own little major market fiefdom. They are 10 Billion in debt. Honestly, it couldn't have happened to nicer bunch of duchebags.
This network didn't die because radio is dead.
iHeart, aka "Clear Channel" killed terrestrial radio.
They took over thousands of local, mom-and-pop radio stations that actually served their local communities, and replaced them with homogenous, centrally-controlled corporate radio full of flag waving, auto-tuned crap music and ads for fake viagra and gold investment schemes.
OK, I spent nearly 4 decades in Broadcast and Network radio, worked all over the country, nothing under a top 10 market and eventually ending up in NYC in management in network radio and finally as a consultant based in NY, (retired from the biz now).
You are correct about the executive bonuses, same/same. Clear Channel/iHeart became a behemoth and ended up paying huge sums of monies for large market radio properties in big bundles. Hence the debt. As a very large company, they became slaves to the shareholders/Wall Street. They HAD to meet expectations and revenue every quarter to keep their share value. How did they do this, depleting staff, jettisoning higher paid folks who knew how to actually create a product and not just bean-counters. As pointed out here, creating also-rans all over the country with voice-tracking and other network feeds, Program Directors locally couldn't make local decisions because all edicts came from the mother ship in San Antonio. Of course there is much more, but it's exactly the same sort of idiocy that implodes many businesses.